May 13, 2012– GREECE – What may be lost in the noise that is the mainstream press is the fact that Greece has not been in a recession or even a depression, Greece has been in a state of slow motion economic collapse on the scale of past economic collapses such as that of Argentina but so far without the ability to default, devalue and inflate. As the below graph illustrates that following the financial crisis of 2008, Greece had been following a similar economic trend trajectory to that of most western economies including that of the UK, US and Germany, however the real crisis began in late 2009 when the economic recovery from the pit of the Great Recession of 2008-2009 evaporated and the Greek economy began a slow motion collapse that has so far seen Greek GDP in real terms contract by 16% since the 2008 peak, with no end in sight Unlike the V shape of the more regular debt default economic collapses such as that of Argentina’s of 2001 and more recently Iceland. The reason for this is solely due to Greece’s membership of the eurozone which has prevented Greece from defaulting on its debts since early 2010 and engaging in a sharp currency devaluation as markets would have corrected for the fact that Greece cannot compete against other countries. However instead of getting a grip on approx Euro 300 billion of public debt at that time, the Euro-zone despite since a 50% stealth default on private debt has still increased Greece’s total public debt burden by a further Euro 280 billion of 2 scheduled bailouts to stand at a total of over 400 billion Euro’s, leaving Greece far more indebted than where it were in late 2009 when economic collapse began, which is made infinitely worse as a consequence of the fact that Greece’s ability to service this debt has fallen as a consequence of the economic contraction. Similarly Greece as member of the Euro-zone has NOT had the option of experiencing a severe competitive devaluation of its currency of as much as 50% which would have instantly turned Greece’s trade imbalances around as Greece would no longer be importing goods and services from Germany that it could not afford as well as what little it does manufacture would have become far more attractive to export markets and especially its large tourism sector, which in fact as a consequence of a drop in demand suffered an increase in prices as a consequence of fixed euro costs’ which resulted in further reduction in demand and hence Greece has been in an economic death spiral. The situation has now reached a critical point (though it has been at a critical point for a good 18 months now) where in my opinion Greece now has no alternative but to exit the Euro-zone (not European Union) and it will exit the Euro-zone sooner rather than later i.e. I would be surprised if Greece is still in the Euro-zone by the end of this year and most probable expect Greece to exit during the next few months (Summer 2012). Greece exiting the Euro-zone would crash the banking system as banks across the euro-zone start to fail domino style as a consequence of their direct exposure to 400 billion of Greek debt and counterparty risks which will put immediate pressure on all of the other weak Euro-zone members, with Spain and Portugal the next targets for exit as a consequence of these countries being on the same unserviceable debt fuelled economic collapse trajectories as Greece. In my opinion Spain and Portugal will both exit the Euro-zone within 6 months of Greece leaving so depending on the timing of Greece’s exit Spain and Portugal could also both leave the the eurozone this year. –Market Oracle

Leaders fear where Greece is headed:Speaking exclusively to The Sunday Telegraph, Theodoros Pangalos said he was “very much afraid of what is going to happen” after Greek voters rejected the deal in elections last Sunday. “In the places where the police voted, the fascists got 25 per cent,” he said. “They are a serious threat. They have used violence already – you don’t know where it will stop. “You know how it happened in Germany – it started with the Jews, then the Communists, then everybody – it could happen here. This is the country, after the Soviet Union and Germany itself, with the biggest percentage of [Second World War] casualties in its population. We will be in wild bankruptcy, out-of-control bankruptcy. The state will not be able to pay salaries and pensions. This is not recognized by the citizens. We have got until June before we run out of money. –Telegraph

Government talks turn ugly: Greek politicians traded insults and accusations Sunday following an effort by President Karolos Papoulias to broker a coalition government, increasing the possibility of new elections in the debt-stricken country. Papoulias called together the leaders of the three biggest parties on Sunday, a week after indecisive elections and three failed attempts to form a government. A default by Greece could drag down other troubled governments such as Spain and Portugal. Europe is keeping a nervous eye on Greece, fearing that the political chaos there could lead to defaults on debt that could threaten the future of the euro. Greek failure — or refusal — to make debt payments could hurt banks across Europe. The eurozone economy is fragile, and any financial shock could plunge the region into a deep recession, a development that would ripple across the globe. A default by Greece also could drag down other troubled governments such as Spain and Portugal. –CNN

16 Responses to An unprecedented financial crisis is lurking on the horizon as Market Oracle warns of Greece’s exit from the Eurozone

Sad thing is, this has gone beyond crisis point. The Roman Empire fell apart when its own colonies went against it, Just as the Financial Empire will now. Growth based empires require a form of equilibrium and balance with growth being industry relevant to advances in technology, land and resource acquisition. However the time bomb is always money, food and then war. History repeating itself sadly. Shame as the technology to sustain large populations is mere years away, but will we last to see it potentially implemented or will there be nothing but chaos? Meaning nothing to save!!!! I am in no way religious, I believe in god but not as any religion can describe. But the phrase “God help us” is all I can say.

i see a problem for the future of Europe if there comes this type of financial crisis.. The financial collapse of Europe would have devastating effects world wide as most of the bigger markets would crash..Greece will be the start of it as i expect one or two more countries will also come into the spotlight sometime soon as having such economic problems of the like..Now i am not talking Spain or Italy as they have had problems for quite awhile now..I am to believe that the 5 biggest economies in Europe are Germany, England, France, Italy and Spain. Spain is the 4th largest and its near record level economic depression, Italy has its problems as well even though its been out of the spotlight the last months, England has problems with its economy with hight unemployment and rising debt as well as there is a concencion about maybe leaving the EU, That leaves France and Germany, and with France haveing a newly elected President, talks about cuts have been shadowed while there is talk about printing more currancy instead.. Where that leaves Germany is in an economic hardshell as the main economic power of Europe while the others fall to debt ridden economic duress..If Spain and Portugal leave shortly after Greece it will send signals through out the other member states as well and i would then fear a blacklash economically as other member states leave as well so try and save what is left in their economies..If this were to happen it would effect the worlds markets, more than likely causeing a crash and there a new world depression…

Eventually the world economy is going to collapse, world war three will begin, then more likely or not a bunch of demons will appear in the sky claim to be aliens here to save mankind all you have to do is bow down to the master alien Satan. At that time the real tribulation will begin and no rapture will come like the church people expected. Most will follow the aliens into hell while a few will repent.

James, what comes next concerning the tribulation is speculation. Some of us accept the Blessed Hope of the rapture, and there are scriptures to support it just as you can find scriptures to support your vision of hell coming. “Following the aliens into hell” may not be needed, as earth will be in hell, and that includes all upon it, including the Christians who repent. that is, if the Christians are left behind instead of put in a safe place. It is not whether we deserve the safe place, it may be God’s will to save us there, regardless of whether we deserve it, if we believe in Him.

For what this is worth. While walking our dogs a few days ago I discovered a new baders warren. Next day the six year old living next door was outside and I said, “Ask your Mom and Dad if you are allowed to come for a walk so I can show you where the new set of badgers have began to settle”
He said, “I can’t”, there was a programme on tv thay he had to see.
So I carried on.
Then he ran after me and said,”What app is it, the badgers.?
I said it wasn’t an app.
He swung on his heel, pushing buttons on his mobile and muttered,”My Dad said there is an app for everything”
Not really related to Greece, but a startling example of the disconnection occuring in this time, from nature. Unsure what it means, or where its leading.

That’s very depressing. I would’ve loved to have gone on that walk. There is a huge disconnection even though we are all so connected in technolgical ways. My friends asked why I don’t have an iPhone, use instagram, etc. a lot of information but not a lot of knowledge. The other day I was explaining an event that happened in Europe and a young woman said to me I have no idea what’s happening in other countries and she laughed about it. And another woman said oh I read that story while the other woman sounded surprised saying you read world news? Why? She said oh I was bored at work that’s the only reason I read it. I was dumbfounded and told them I read it all the time because I care and want to know. Sadly many out there don’t care or they are too concerned with what Justin Bieper tweeted.

Would you be very dissappointed in me if I said I never hear of Justin Bieper, and going on what you have said, will remain blissfully unaware of who he is. I did post a reply to your post, but this site is just too busy. And it never got posted.

The Hopi’s said we would be disconected from nature when this time came. If we don’t reconect we won’t make it. We have to go back to the old ways to survive, re-conect to the creator and His creation.

“Five years of a pure neo-liberal regime had made Iceland, (population 320 thousand, no army), one of the richest countries in the world. In 2003 all the country’s banks were privatized, and in an effort to attract foreign investors, they offered on-line banking whose minimal costs allowed them to offer relatively high rates of return. The accounts, called IceSave, attracted many English and Dutch small investors. But as investments grew, so did the banks’ foreign debt. In 2003 Iceland’s debt was equal to 200 times its GNP, but in 2007, it was 900 percent. The 2008 world financial crisis was the coup de grace.

Contrary to what could be expected, the crisis resulted in Icelanders recovering their sovereign rights, through a process of direct participatory democracy that eventually led to a new Constitution. But only after much pain.

As Icelanders went to vote, foreign bankers threatened to block any aid from the IMF. As Grimsson said: “We were told that if we refused the international community’s conditions, we would become the Cuba of the North. But if we had accepted, we would have become the Haiti of the North.”

With the support of a furious citizenry, the government launched civil and penal investigations into those responsible for the financial crisis. Interpol put out an international arrest warrant for the ex-president of Kaupthing, Sigurdur Einarsson, as the other bankers implicated in the crash fled the country.

But Icelanders didn’t stop there: they decided to draft a new constitution that would free the country from the exaggerated power of international finance and virtual money.

To write the new constitution, the people of Iceland elected twenty-five citizens from among 522 adults not belonging to any political party but recommended by at least thirty citizens.

Today, that country is recovering from its financial collapse in ways just the opposite of those generally considered unavoidable, The people of Greece have been told that the privatization of their public sector is the only solution. And those of Italy, Spain and Portugal are facing the same threat.”

Everything we need to know is right here. Four girls living in a small village without electricity received messages from the Mother of Jesus in the years 1960-65. The chastisement revealed in the night of the screams is scary. http://www.garabandal.org/